Epithelial cell differentiation requires the formation of the apical junctional complex, a membrane-associated structure that includes adherens junctions (which mediate stable adhesion between epithelial cells) and tight junctions (which regulate the movement of water and solutes between epithelial cells). Now, on p. 3835, Kai Schmidt-Ott and colleagues report that the mammalian transcription factor grainyhead-like 2 (Grhl2), an epithelium-specific homologue of Drosophila Grainyhead, regulates the molecular composition of the apical junctional complex. Grhl2, they report, determines the expression levels of E-cadherin and claudin 4 (Cldn4) – key components of adherens junctions and tight junctions, respectively – in several types of epithelia. Other experiments reveal that Grhl2 regulates epithelial differentiation in vitro and in vivo, that Grhl2 deficiency in mice results in defective neural tube closure, and that Grhl2 associates with conserved cis-regulatory elements in the Cldn4 and E-cadherin genes. Together, these data suggest that Grhl2 is a transcriptional activator of apical junctional complex components and is, therefore, a crucial participant in epithelial differentiation.